Now, when I listen in from a handset, I get the "sorry the call can not be completed as dialed... or similar recording. If I lift another handset and listen to the ENTIRE DIALING ACTION, the alarm successfully calls my cell phone and it rings. If I don't lift a handset and listen, it won't connect. I unsuccessfully attempted to add 2 second pauses, using the "D" force dial tone, between digits and after the entire number... I am at a loss. I have had numerous people tell me that Fios should not make a difference. FIOS is not Voice Over Internet.

When you say "handset" are you talking a regular telephone or a lineman's set turned to monitor?If you're not using a lineman's set, the lifting of an extension could cause dialing problems unrelated to your problem. The only real way to listen in is with the proper tool so you are not chasing a phantom symptom based on your actions, not the panel's.

If this system was mine I would have the phone going into the alarm panel first and then out to the house phones. This would give line seizure to the alarm panel so that someone couldn't pick up an extension and cause the system to not be able to dial.